On a rainy spring afternoon several years ago, I was pounding the pavement in Manhattan’s Internet advertising district when I looked out from beneath my umbrella to see a large billboard atop a nearby office building. “Welcome to Silicon Alley” the large note read above a comparatively-small company logo blurred by the rain on my glasses. I remember thinking later, "Must be a really nice guy running that firm."
DoubleClick has been “unlocking the power of smart marketing" for as long as I can remember. This month, it will release an integrated search engine marketing (SEM) tool into an already powerful arsenal of intelligent online advertising solutions. The billion-dollar search engine advertising industry is about to have a big new player in the SEM program management sector.
Internet advertising has changed quite a bit since I received that hospitable welcome to New York -- so has DoubleClick. However, a few things haven’t, like a stern commitment to leadership in the industry, strong tools and the guy running the show. I caught up with the “other Kevin Ryan,” DoubleClick’s CEO, last week to get his take on all things search and on the new search tool they have in store for us.
SearchTHIS: What’s your take on all this search craziness, i.e. the explosive growth of SEM?
Ryan: For me it’s not so much craziness. The fundamentals of search and Internet advertising are very strong and search as a subsection of that is doing extremely well. It is very simple, clean and somewhat easy to use. I think it is actually part of a broader trend. I can remember five years ago being on television and being interviewed and being asked questions like "C’mon, how come none of these Internet companies are making any money at all. Why is that?"
I think it is relatively early. Most of these companies are three years old and fundamentally the sector is going to be extremely profitable. Now, the vast majority of Internet companies are making a lot of money, generating lots of cash, are justifying decent valuations -- and search as a component of that is growing very nicely.
SearchTHIS: It sure is, and it’s providing at least one of us with a living, or two, maybe one and a half. Never mind. The big question I am getting from everyone now is, why has it taken DoubleClick so long to get into the space?
Ryan: The part of the space that we would like to play in and like to be a part of is more on the tool side of buying and the bid management side of helping people buy search. The reality is while search is a big market, the bid management sector is still relatively small. The largest player in the bid management space in terms of pure technology sales probably did less than $5 million last year.
SearchTHIS: The choices are a bit limited, but so are ad serving choices, yes?
Ryan: Right, and it [paid listing management] is very fragmented so when people ask why are we so late to enter the space, when no one is generating more than $5 million right now, it is still very early. If we wanted to enter the paid listings market, yes, it would be a bit late, but that’s not our intention.
SearchTHIS: On that note, what do you think of all the bad press sponsored listings are getting? For some reason, people have been led to believe that search listings should be unbiased oracles of information.
Ryan: The beauty of the Internet is that no one is forced to do anything. What’s happening is there are a lot of different product offerings. Sponsored listings are just one of the product offerings. If consumers feel it works well and feel like they should use it, of course advertising should be disclosed. But that’s it. At a certain point, it’s not that much different than the yellow pages where anyone can buy a full-page ad and have a bigger ad than a competitor. Does that hurt the credibility of the yellow pages? I don’t think it does. Advertising is part of the competition there.
SearchTHIS: Agreed, we are clearly sharing brainpans on that one. At the Insight conference, I overheard a few non-search adopting advertisers saying things like, "We are going to wait for DoubleClick to enter the space before we do anything." What are some of the plans you have to separate yourselves from existing competitors in the paid search program management business? No pressure.
Ryan: Well, what you’ve heard independently is something we have certainly been hearing from clients. It’s flattering that they’re waiting for us and a great reflection on our client relationships. We’ll be launching in the second quarter and everyone will be able to take a look at the tool at that point. I think the real challenge across the industry is that the bar is being raised all the time on search management. In the beginning, maybe an advertiser would have a couple of hundred words, now they are buying hundreds of thousands, or even a million words, on multiple search sites. You can’t do that manually anymore and technology has to solve that so the challenges over time are even as big, or bigger, than ad management.
The specifics which people will need include helping understand the ROI process and adapt to the bid process as often as possible and have as much of it as possible be done automatically. They also want to compare how the hypothetical keyword pencil would be performing on Google versus Overture or Espotting or others and have the process be very seamless. We have at least 10 years of growth left, easily.
SearchTHIS: Speaking of growth, you are working with advertisers directly and have agency clients as well. Is this new wonder tool going to open up a new revenue channel for DoubleClick with perhaps, SEM firms and their ilk?
Ryan: I think it will. A lot of users of this product -- people who buy keywords are email clients like Procter & Gamble or Abacus, the catalog customers -- some of the biggest brands in the world. The best example in what you are referring to is that we currently don’t really work with a lot of the very small firms out there, mom-and-pops. Over time this is the one tool which may open up that distribution channel. If you look at our email and ad serving technologies we haven’t had the best product for someone who spends ten thousand dollars a year. We tend to focus on larger companies and this will open that distribution channel while creating opportunities to sell other products like site analytics.
SearchTHIS: Do you think there is potential customer base in small- to medium-size enterprises for DoubleClick?
Ryan: We’ll see. For the past few years we have definitely not been focused on them, we have been focused on providing more products to the same customers, the top two or three thousand marketers out there. However, this is a product that really adapts easily to clients of almost any size. In order to really reach them, we will need a lower cost structure and an easier to user product. The lighter version, if you will, of what I call the industrial version of a product, which would apply to larger organizations.
Next Week: Is DoubleClick building or buying? And how does the CEO of the world's leading Internet advertising solutions provider deal with living in the shadow of a search marketing pundit?
Kevin Ryan’s current and former client roster reads like a “who’s who” in big brands; Rolex Watch, USA, State Farm Insurance, Farmers Insurance, Minolta Corporation, Samsung Electronics America, Toyota Motor Sales, USA, Panasonic Services and the Hilton Hotels brands, to name a few. Kevin believes in sound guidance, creative thought, accountable actions and collaborative execution as applied to search, or any form of marketing. His principled approach and staunch commitment to the industry have made him one of the most sought-after personalities in online marketing. Kevin volunteers his time with the Interactive Advertising Bureau, Search Engine Marketing Professional Organization and several regional non-profit organizations.
Meet Kevin Ryan at Ad:Tech May 24-26th, 2004 and the iMediaLearning Search Tour.